SEBI Chairman UK Sinha has cautioned mutual fund houses on debt fund management and advised them to be careful while investing in debt instruments, said two senior officials from the mutual fund industry. He was addressing fund officials at the Annual General Meeting (AGM) of AMFI held today in Mumbai.
Expressing his concern over the recent Amtek Auto episode, he said that fund houses should manage their debt portfolio proactively. He asked fund houses not to rely completely on credit rating agencies but instead develop expertise on their own.
Further, Sinha has put forth an interesting statistics before fund officials on their exposure to downgraded debt securities. He said that the mutual fund industry had an exposure of Rs.4000 crore to downgraded paper as on July 2015 which was went up to Rs.13,000 crore in August 2015.
Earlier this month, SEBI has sent an email to AMC CEOs advising fund houses to reassess their risk management policy related to fixed income schemes.
Meanwhile, AMFI has given extension to Leo Puri, MD, UTI MF, Milind Barve, MD HDFC MF, Vikaas M Sachdeva, CEO, Edelweiss MF and Saurabh Nanavati, CEO, Religare Invesco as Director on AMFI’s board, said sources.
The board will appoint new chairman and vice chairman soon.
Currently, there are 15 members in AMFI board of which seven are from top ten fund houses and four each from mid and small sized AMCs.
